Against the backdrop of the NSW southcoast shire of Eurobodalla, a region devastated by the 2019-2020 bushfires, the project conducted a microgrid feasibility study.
Photo credit: Gillianne Tedder

31 May 2024

By Sarah Wilson

Intuitively it makes sense that microgrids are a good idea. There are many of us that want that to be the case and for good reason. They have the potential to bolster local resilience, increase utilisation of renewable energy sources and give a sense of autonomy back to communities.

One of BSGIP’s most substantial pieces of research is drawing to a close. The Southcoast microgrid Reliability Feasibility (SµRF) project is a $3.1 m transdisciplinary project that explores the challenges and benefits of microgrids within an Australian context. Set within the New South Wales south coast shire of Eurobodalla, a region devastated by the 2019-2020 Black Summer, the project took a deep dive into this technology and how it could be integrated into today’s complex and multifaceted energy system.

This article focuses on two recently published reports; a technical report that lays out a number of scenarios using real-world data applied to selected sites, and a social science report examining governance, social and regulatory issues under the current system.

But firstly,

What is a microgrid?
A microgrid acts like a mini electricity grid, capable of providing power to a section of a larger grid, for example a township, when cut off from the national system such as during a bushfire event. As opposed to Stand Alone Power Systems (SAPS) that operate independently of the main electricity grid, microgrids are usually connected to the larger grid, but crucially they can also operate independently when needed, if or when disaster strikes.  

Technical report

Against the backdrop of the beautiful Eurobodalla coast, the SµRF technical team analysed, quantified and built illustrative models and conceptual designs for local energy systems in eight selected sites that represent the diversity of the Eurobodalla Shire Council.

Key takeaways from the technical report:

  • As a starting point the technical team quantified the way in which electricity is currently used and supplied across the Eurobodalla.
  • The analysis of electricity use indicates that reducing electricity consumption by half during an emergency scenario is well within the realm of feasibility, being equivalent to switching off electric hot water systems and air conditioners – in properties that have those appliances.
  • In communities that can accommodate a 4.99 MW solar farm close to town they are generally able to power the community indefinitely, as long as they have a large battery.
  • Four models for potential local energy systems were devised; three microgrid archetypes and a fourth option: 1) a small solar microgrid, 2) a large solar microgrid with a solar farm, 3) a diesel microgrid 4) a battery installed behind-the-meter at a single site.
  • Conceptual designs were then developed for small and large solar microgrids for the eight sites assessing the length of time for which they could independently supply electricity in ‘islanded’ mode, that is, disconnected from the main grid.
  • Preliminary business cases and implementation plans, including cost estimates, for each of the microgrid models were compiled for each of the eight communities.
  • The analysis brings to the surface a number of key issues for consideration about the feasibility and desirability of microgrids, particularly in relation to resilience.
  • Impact of natural disasters – an issue that is only beginning to be studied but needs to be factored in is the reduction of solar irradiance during natural disasters – from rain clouds or bushfire smoke. One study from 2019 -20 Black Summer found that solar generation during fires was generally better than during winter.
  • Diesel generators are by far the cheapest systems to deploy currently.

A core strength of the Battery Storage and Grid Integration Program is that we get to work with industry. For the SµRF project we interviewed professionals who work in and around energy and resilience policy and planning, as well as householders and small business owners as a way to better understand the feasibility of microgrids in Australia. As a result, the findings from our research reflect the current state of play, not an idealised version of what the energy system could look like at best. There is a place for such ideas, let’s not lose sight of that important overarching ideal but for now, let’s put that to one side and return to SµRF.

Key takeaways from the social science report:

  • Interviews with stakeholders identified a number of benefits to microgrids such as reliability, avoided transmission, community building and resilience to extreme events.
  • The report has a section on the importance of governance and business models as these two themes emerged as key challenges to whether microgrids are likely to have a positive impact on energy users.
  • Business models are complicated in the current governance framework, for example, current rules do not allow networks to own generation assets AND trade in the energy market. Example no. 2, it is difficult for a community group to finance and take on the risk of a microgrid.
  • The report makes the point that electricity bills are ‘socialised’ – this mean that fixed costs are spread evenly across customers, even though it costs more to service remote areas, regional customers pay the same as those connected to a more central part of the grid.
  • The biggest policy challenge relates to social equity and sustainability more broadly. The interview analysis reveals limitations in the market governance regime’s capacity to find the most efficient and fair solution to a resilience gap because of the complexity of the energy system, the skills and capacity gaps organisationally as well as the heterogenous nature of the Australian community.
  • There is currently no regulatory requirement for networks to invest in resilience measures. The current framework does not incentivise improvements in resilience such as measuring networks’ ability to recover quickly from major event days.
  • Interviews with industry professionals reveal that the values, benefits and expectations the public have of microgrids are not readily accessible or straightforward in the current energy governance framework.
  • Interviews revealed that there seems to be no agreement on ownership of microgrids, across stakeholder groups. Ownership is a big issue with a natural tension between householders and experts. Overwhelmingly householders gravitated towards community ownership and experts favoured other options such as networks, or local councils.
  • Many participants agreed trials are needed to explore in concrete terms what benefits this technology could provide in remote areas, particularly in terms of resilience.
  • Emergency community hubs with the facility to plug in a diesel generator may be a cheaper, more equitable alternative. Earlier SµRF research suggested, supplying energy to vital telecommunications infrastructure that enables phone coverage and EFTPOS is also key as is supplying power for petrol stations, water pumps and refrigeration in shops and chemists, across a whole region may improve energy resilience more than providing electricity to whole communities in only some parts of a council area.
  • In terms of local resilience in council areas, an emergency management officer did not see microgrids and resilience being coupled together naturally. Instead, he believed it may make more sense to have back-up power across the council area. This would include locations such as nursing homes, emergency shelters, petrol stations and supermarkets.
  • In the current context microgrid projects risk disappointing the public, potentially creating negative public perceptions of microgrids and renewable projects generally. The exception could be that in remote parts of the grid, microgrids have the potential to provide reliability and resilience benefits.

There may well be a place for microgrids but it is fair to say we are not there yet. If or when we do see microgrids materialise how they are run and by whom, and what  benefits they provide may prove to be very context specific.

Thanks to our partners Southcoast Health and Sustainability AllianceEssential Energy and Zepben.

What next?

Three more reports coming soon  –  SµRF community workshops report, a First Nations report and a final summary report.

More information

Southcoast µ-grid Reliability Feasibility (SµRF) project – Battery Storage and Grid Integration Program (